Published: 17/10/2018As Brexit negotiations continue, the anxiety levels of the British public are rising. So far Theresa May has been unable to solve the deadlock and come up with a workable deal. This leaves the UK in an uncertain position with less than 6 months to go to the deadline in March 2019.
Warnings have been made about the possibility of a fall the pound, particularly against the Euro, and rising inflation. Worst of all, the governor of The Bank Of England, Mark Carney suggested that in a worse case scenario, the property market could lose up to a third of it's value! Putting that into some context, this would make the property crash significantly worse than that of the financial crises of 2008 where property values fell by an average of 18%.
However, we need to consider that a fall of this scale this is very unlikely, and the press in true style jumped all of this headline in a sort of sensationalist rehash of what was termed "Project Fear". Most experts agree a no deal or hard Brexit is likely to have some negative effect on property prices, although it is likely to be far less significant.
Many of the conditions that created the financial crises of 2007-2008 don't exist in today's market. A much more regulated banking sector has prevented irresponsible lending. Affordability measures for lending are much stricter now lending is judged much more closely than on affordability rather than income meaning more controlled and stable financial environment.
The triggers of increased cost of trade, inflation, unemployment, and net migration will have a knock on effect to the housing market which is also likely to result in lower volumes of transactions (the number of property sales) and increased uncertainty. This means more people are likely to stay put for now, watch and wait.
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